The Bank of Mum and Dad is now considered the 5th largest bank in Australia – It helps 60% of first homebuyers and in 2023 it was worth $35 billion annually to fund property purchases. This No Regrets Guide to Helping your Children is a very valuable guide to parents wanting to provide financial assistance to their children.
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Patricia Howard, author of The Bank of Mum & Dad, is an Australian financial planner, media commentator and former finance journalist who also wrote the book The No-Regrets Guide to Retirement, which was previously reviewed by Good Financial Reads.
Because Patricia Howard has advised so many people over her career, she is well positioned to see both the good and not so good effects of providing financial assistance to children. There can be unintended consequences if the child does not clearly understand why the money has been provided. The most important thing is for the parent to clearly define if the money is a gift or a loan and this should be documented. What happens if down the track your child develops a relationship which ends in tears. Is the parent going to see half the money go to the partner or can they step in and reclaim the money if it has been documented as a loan.
The way money is gifted may affect the parent’s eligibility to the Age Pension as some of that money may be counted as part of their assets for several years. Before money to is given to a child, advice should be sought from your accountant and solicitor.
This is a very comprehensive book that covers the following chapters:
- No is a Complete Sentence
- Before you Write that Cheque
- Why Today’s Property Market is Nothing Like the One you Remember
- What Other Help is Available
- How to Get it Right
- When They Want to be Their Own Boss
- Can You Afford to be Generous
- When Money is No Object – The Challenges No One Warned You about
- Rebuilding When Things Go Wrong
The book may be purchased as either an electronic or hard copy from Patricia Howard’s Website or Amazon.
I believe everyone thinking of helping their child financially should read this book. It is a very sobering comment when the first sub-heading of Chapter 1 is:
If You Can Avoid Helping, Do
Any parent wanting to help their child financially should also have their child read this book. The child should also understand their obligations and unintended consequences, particularly if another party is involved in a relationship down the track.
Patricia Howard is an articulate author. Both her books are easy to read and understand, and I would recommend both her books. I hope she will continue to provide such valuable insights into the topic of money management.
Glenis Phillips – Good Financial Reads
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
